Parliament Committee Endorses VAT Administration Reform Bill as a Prerequisite for Macro-Financial Aid

Bill № 16037-d

According to Мінфін: The Verkhovna Rada’s Committee on Finance, Taxation, and Customs Policy has put forward a recommendation to approve Bill № 16037-d, aimed at streamlining the administration of Value Added Tax (VAT). Known as the "Amendments to the Tax Code of Ukraine to Simplify VAT Administration," this legislation introduces several key reforms, including the automated preliminary completion of tax returns and granting sole proprietors (FOPs) the option to select their VAT reporting periods.

Key Provisions

The bill proposes that all VAT payers benefit from automatic pre-filling of tax reports and invoices based on data already held by the State Tax Service's information systems. Additionally, VAT-registered individual entrepreneurs will be able to choose between monthly and quarterly reporting intervals. The threshold that triggers unscheduled document audits for budget reimbursements or negative VAT balances is set to rise sharply-from 100,000 to 1 million hryvnias.

Another important measure simplifies the preparation of consolidated VAT invoices when goods or services are supplied to non-VAT payers following advance payments. This bill aligns with Ukraine’s international commitments to the European Union and the International Monetary Fund, making its approval a critical condition for obtaining macro-financial assistance.

If enacted, these reforms are expected to significantly ease tax compliance for Ukrainian businesses, especially individual entrepreneurs. The automation of tax reporting should cut administrative burdens and reduce the time required for filing, while the increased audit threshold aims to lower the frequency of inspections for small and medium-sized enterprises. These changes are anticipated to foster a more favorable business environment across the country.

In light of the recent approval of the VAT reform bill, it's important to consider how these changes will interact with other tax policies. For instance, the recent decision by Ukraine's Parliament to eliminate the VAT exemption on international parcels valued under €150 starting in 2027 could further impact businesses and consumers alike. Understanding the implications of this move is essential for navigating the evolving tax landscape. To learn more about this development, read our article on the removal of VAT exemptions for international parcels.